By tackling the soft issues such as information quality, credibility, and trust - SB improved its ability to address the hard ones: how much and where to invest
HOW SMITHKLINE BEECHAM MAKES BETTER RESOURCE-ALLOCATION DECISIONS
BY PAUL SHARPE AND TOM KEELIN greatest, the demands for funding were growing. SB's executives felt an acute need to rationalize their portlifehlood of any pharmaceuticals folio of development projects. The company. Ever since the 1989 merger patent on its hlockbuster drug Tagathat created the company, however, met was about to expire, and the SB believed that it had been spendcompany was preparing for the iming too much time arguing about pending squeeze: it had to meet curhow to value its R&JD projects-and rent earnings targets and at the same not enough time figuring out how to time support the R&X) that would make them more valuable. create the company's future revenue streams. The result was a "conWith more projects successfully strained-budget mentality" and a reaching late-stage development, widely shared belief that SB's probwhere the resource requirements are lem was one of prioritizing development projects. Paul Sbarpe is vice president and director of project management Major resource-allocation deciin neuroscience at SmithKline sions are never easy. For a company Beecham in Harlow, England. Tom like SB, the problem is this: How do Keelin is worldwide managing you make good decisions in a highdirector of the Strategic Decisions risk, technically complex business Group, an international managewhen the information you need to ment-consulting firm based in make those decisions comes largely Menlo Park. California. from the project champions who are
I was spending more than half a billion dollars per year on R&.D, the
N 1993,
SMITHKLINE BEECHAM
competing against one another for resources? A critical
